ITEM 5: FEES AND COMPENSATION
A. Colombard Funds
Management Fee and Incentive Allocation. We are paid a monthly “management fee” for managing
the Colombard Funds’ investment portfolios and providing certain related services. The
management fee is calculated separately for each limited partner or shareholder (as applicable, a
“Colombard Investor”), based on that Colombard Investor’s capital in the relevant Colombard Fund
as of the beginning of the relevant month. The Colombard Funds’ governing documents and
investment management agreement specify a management fee rate of 2.0% per annum of each
Colombard Investor’s capital.
The Colombard Master Fund makes a special “incentive allocation” to the General Partner (in its
capacity as general partner of that Colombard Fund), of a stated percentage (an “Incentive Allocation
rate”) of the profits (both realized and unrealized) in respect of each Colombard Investor’s
investment in a Colombard Fund, to the extent those profits exceed “unrecovered” losses from earlier
periods – a “high water mark.” The Colombard Funds’ constituent documents specify an Incentive
Allocation rate of 20%. The Colombard Master Fund makes incentive allocations at the end of each
calendar year and at other times when Colombard Investors withdraw capital, but then only in
relation to the capital withdrawn.
Our agreements with the Colombard Funds permit variations in the management fee and incentive
allocation terms in particular circumstances. We currently have fee and incentive allocation
reductions in place for all investors and available for all investments in the Colombard Funds through
the date of this Form ADV Brochure. We currently anticipate offering reduced fees for an
undetermined period of time, but do not intend to offer reduced fees to new investors on a general,
ongoing basis.
The Colombard Funds pay our fees directly from their assets that we manage. Incentive allocations
take the form of increases in the value of the General Partner’s interest in the Colombard Master
Fund.
Other Fees and Expenses.
Each Colombard Fund bears all its ongoing operating costs and its share of the Master Fund’s costs,
which are outlined in the relevant private placement memoranda. These include, among other
things:
• brokerage commissions and other transaction-related compensation and charges arising out of
transactions involving Colombard Fund assets;
• interest and borrowing charges on securities sold short, and on margin and other borrowings;
• custodial and bank service fees;
• costs of quotation, computerized news, pricing and/or statistical services or software, and of
systems, facilities and third-party services for order placement, order management, and
clearance and settlement functions;
• costs directly related to researching, acquiring, holding, and/or monitoring and administering
investments and potential investments, including costs of (A) systems and services for modeling,
testing, and other analysis of portfolio construction, attributes, and/or risks; (B) third party
investigative, analytical and/or reporting services; and (C) systems and services that facilitate
conducting and managing investment research, analysis and investment decision-making,
including costs of developing Alambic’s proprietary systems and tools in addition to or in lieu of
similar third-party services;
• auditing, accounting, third-party-administration, external bookkeeping, tax preparation and
reporting, legal and other professional fees and costs, including fees and costs paid to Alambic’s
counsel for services relating to the Colombard Funds’ legal affairs, which may include
documentation and negotiation of special arrangements between the Colombard Funds and any
investor, and legal fees and costs in connection with lawsuits, arbitrations, or other controversies
or the Colombard Fund’s indemnification obligations owed to Alambic, its affiliates and
employees, and members of any Colombard Fund advisory or governance committee;
• costs arising out of licensing, governmental registration, and membership in self-regulatory
organizations of or by the Colombard Funds and their affiliates and costs associated with the
Colombard Funds’ and their affiliates’ registration and filings with and licensing by governmental
and self-regulatory organizations and costs associated with regulatory, tax and other filing and
reporting requirements by or related to the Colombard Funds, including filings required of
Alambic as a result of their involvement in the management of or provision of services to the
Fund or the Master Fund (including Schedules 13D or 13G and Forms 3 and 4, and requirements
under FATCA);
• transfer, withholding, income, stamp and other taxes and duties (which may in certain
circumstances be specially charged by the Fund to one or more Limited Partners);
• the Colombard Funds’ share of the costs associated with insurance for directors’ and officers’,
errors and omissions, and possibly other types of insurance maintained by Alambic or the
Colombard Funds covering Alambic and its owners and employees, and the Fund’s or Master
Funds’ advisory or governance committee members;
• Colombard Fund meetings and other governance activities and costs of reporting and making
information available to investors; and
• all other reasonable expenses related to the Colombard Funds management and operation, or to
the purchase, sale or transmittal of Colombard Fund assets, all as Alambic determines in its sole
discretion.
The Colombard Funds may pay these costs directly, or Alambic may advance costs and be reimbursed
by the Colombard Funds. Commissions and transaction-related services are generally paid and
deducted directly from the Colombard Funds brokerage account(s).
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